An unidentified oil worker checks a pipe into a waste oil pit in the Persian Gulf desert oil fields of Sakhir, Bahrain, while camels are coraled nearby. OPEC today decided to cut its output by 2.2 million barrels a day.

Stocks declined in the early going after a larger-than-expected loss from Morgan Stanley offered fresh evidence of the sizable obstacles the battered financial industry still faces. The company posted a loss of $2.37 billion, or $2.34 per share, for the fiscal fourth quarter. The report came a day after rival Goldman Sachs Group Inc. posted its first quarterly loss since going public in 1999.

Some selling had been expected after Tuesday’s huge rally in which the Dow Jones industrial average rose more than 4 percent and other indexes gained more than 5 percent. The moves came after the central bank lowered its federal funds rate target to a range of zero to 0.25 percent – the lowest levels on record.

But after briefly moving into positive territory, stocks struggled to hold on to the big gains logged the day before as investors grappled with signs of a worsening economy, including more layoffs and plunging oil prices, and the magnitude of the Fed’s actions.

“This is a whole lot of new information for people to digest,” said David Waddell, senior investment strategist and chief executive of Waddell & Associates. “Now we need time to sit back … and figure out what it all means.”

Some investors also likely took the Fed’s sharp rate cut as an indication of how dire the global financial crisis and economic troubles really are.

The Fed’s move was an unprecedented one aimed at boosting borrowing and lending. The central bank said Tuesday it anticipates the weak economy will keep the target rate low for “some time,” and added that it is mulling the possibility of buying Treasurys – in effect, printing new money.

Still, despite Wednesday’s decline, investors have been rather resilient in recent trading sessions, an encouraging sign for analysts who believe the market might be entering a period of stability after the unrelenting selling of the past three months.

“Even if the market is down 100 points, the fact that it’s been in a narrow trading range I think is very positive,” Waddell said.

According to preliminary calculations, the Dow Jones industrial average fell 99.80, or 1.21 percent, to 8,824.34, after falling as many as 146 points earlier in the session. The Standard & Poor’s 500 index slipped 8.76, or 0.96 percent, to 904.42, and the Nasdaq composite index fell 10.58, or 0.67 percent, to 1,579.31.